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Young Adults to Drive OTT Video Growth in Latin America

18 Jun, 2015 By: Erik Gruenwedel

Netflix may be in 43 countries throughout Latin America, but consumer adoption remains a work in progress. That should change in the next 10 years as millennials (younger adults between the ages of 18 and 34) enter the market, accounting for 65% of Latin American over-the-top video consumption by 2025, according to new data from The Diffusion Group (TDG).

While Internet penetration in Latin America lags behind the United States significantly, the percentage of broadband users is about the same. This opportunity has not been lost on Netflix, which entered Latin America in 2011 to myriad consumer adoption issues, including piracy, limited credit card use and the dominance of free-to-air broadcasters.

Those challenges are disappearing and Netflix is responding by upping spending on Spanish-language original content aimed at millennials. The SVOD leader last year announced that Internet-connected smart-TV penetration in Latin America was at an all-time high.

“The fact that Netflix is expanding its efforts in the region should send a strong message to others that the potential of OTT in Latin America is real,” Joel Espelien, senior analyst with TDG, said in a statement.

In fact, the research firm projects OTT video will account for 25% of all video viewed in Latin America, generating $8 billion in annual revenue.

“Much is said about the rise of U.S. millennials and the impact they will have on video viewing. But few understand that these same demographic trends are creating tremendous opportunities for OTT vendors in international markets — Latin American in particular,”  Espelien said.

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